WATCH FOR: June Consumer Sentiment (9:55 a.m. Eastern Time, final reading): seen 81.9; previously 81.2. AZZ, Commercial Metals, finish Line and KB Home are among companies scheduled to report quarterly results.

THE BREAKFAST BRIEFING

Wall Street is doing a double-take following this week’s batch of disappointing economic data.

At least five Wall Street firms on Thursday slashed their growth forecasts for the current quarter. Among them, Goldman cut its second-quarter GDP target to 3.5% from 4.1%. Barclays went to 2.9% from 4.0% and RBS trimmed its target to 2.2% from 2.7%.

Fueling the trepidation: the Commerce Department’s consumer spending report, which showed Americans spent cautiously last month despite stronger income growth. That’s a sign that the economy is struggling to gain steam following the winter doldrums. Adjusted for inflation, personal spending was negative last month.

“The problem is that growth has to come back big, in the second quarter pretty much, to get the whole year up to 2% GDP and after [Thursday's consumer spending] report, GDP is not going to get there on the backs of consumers,” Chris Rupkey, chief financial economist of Bank of Tokyo-Mitsubishi UFJ, said in a note to clients.

“It looks like the consumer started the summer early, out sitting in lawn chairs instead of taking trips to the mall,” he said, while adding he’s “not seeing the bounce yet from the first quarter train wreck.” The economy contracted by 2.9% in the first three months of the year, the worst quarterly performance since the beginning of 2009.

Stock investors have repeatedly shrugged off weak economic due to the poor winter weather. The rally has stayed on track under the assumption that the economy would recover once the weather warmed up. The S&P 500 finished Thursday at 1957, up 5.9% this year and just shy of its all-time high.

But if the economy isn’t poised to bounce back in the way that many expect, investors could be forced to rethink their models.

“The complacency within markets is at an extreme where only the positive implications are priced in,” says Michael O’Rourke, chief market strategist at JonesTrading Institutional Services. “Should the data disappoint or even if we have a simple reality check, this episode is likely to prove to be a major missed selling opportunity.”

Morning MoneyBeat Daily Factoid: On this day in 1972, the original video game company Atari was founded.

Manitowoc surged 12% in after-hours trading on a New York Times report that an activist investment firm is seeking to break the company in two.

KB Home is forecast to report second-quarter earnings of 21 cents a share, according to a consensus survey by FactSet.

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